Plans to use smart electricity meters to cut costs and reduce environmental damage will fail without government backing, says green advisory group The Carbon Trust.

Widespread installation of the technology could save businesses more than £300m a year and cut annual carbon emissions by 2.5 million tonnes, according to the Trust’s three-year trial.

But the energy sector is dragging its feet because the direct financial benefit is limited.

The cost of installing and maintaining the IT, and managing the data produced, significantly outweighs the benefits to the power supplier, says Carbon Trust head of technology acceleration Mark Williamson.

‘The involvement of utilities is key, but there is no financial incentive to roll it out and that will act as a market barrier,’ said Williamson.

Some utilities, including Centrica and EDF, are running pilots (Computing, November 23).

But government commitment is needed to ensure the widespread rollout of smart meters and the adoption of appropriate standards for meter functionality, data availability and data transfer procedures, says Williamson.

Consumer groups are also lining up behind calls for regulatory involvement. The Energy Retail Association wants a deadline for rollout of the meters in the next decade. And consumer group Energywatch says government action will also be needed to establish appropriate interoperability standards for the meters themselves.

But energy regulator Ofgem, which is co-ordinating trials with a number of utilities, says a directive forcing the industry to roll out smart meters is not the answer.

‘Developments should be market-driven and consumers should pursue commercial deals already available if the business case can be made,’ said an Ofgem spokesman.

The Carbon Trust trial funded the installation and maintenance of smart meters at 580 businesses across the UK.

Unlike traditional gauges, smart meters provide real-time data about energy use, allowing both supplier and consumer to track electricity consumption. Some systems also allow users to access their meter online.

There are potential benefits to suppliers – more accurate readings would cut costs by eliminating meter readings and enabling more intelligent tariff structures, for example.